Nvidia Corp. is a company known to both technology enthusiasts and investors. If you are considering buying the stock, or if you already own it, this quarterly review of key metrics can help you with your own research and decisions about the company as an investment. These updates will also include comparison of results with other major players in the market. semiconductor space. Keep in mind that no two companies are the same, not even rivals compete in all segments. Any investor needs to do their own research to make informed long-term decisions.
Here is the breakdown of sales by market platform:
With such incredible sales growth, it’s probably not a surprise that Nvidia shares have outperformed benchmarks – they were up 17% this year and skyrocketed 122% in 2020. Nvidia surpassed $ 5 billion in quarterly sales. for the first time in the last trimester. In the three-month period before that, from August to October 2020, the company surpassed $ 4 billion in sales for the first time.Price Power and Profitability Here are year-over-year comparisons of sales growth, margins Gross and operating margins for Nvidia and five other major players in the semiconductor industry held by the iShares PHLX Semiconductor SOXX ETF, + 1.60%. The ETF holds shares in 30 manufacturers, designers and manufacturers of semiconductor equipment. Each company has a unique combination of lines of business. This means that a direct comparison may not be meaningful.
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The list includes AMD and INTC, which compete directly with Nvidia in some areas, but also Broadcom Inc. AVGO, + 1.40%, Texas Instruments Inc. TXN, + 1.48% and Qualcomm Inc. QCOM, + 1.86% to round out the group. competing to make chips for various industries and platforms, including mobile devices and telecommunications. The gross margin of a company is its sales, minus the cost of goods sold, divided by sales. It is a measure of pricing power. An expanding gross margin with growing sales is a good sign. If gross margin is contracting, it could mean that a company is forced to increase the use of the discount to avoid competition. Comparing just two periods may not be especially meaningful, but it is important to understand whether there is a trend. A company’s operating margin is its earnings before interest, taxes, and depreciation divided by net sales. It can be considered “return on sales”. Nvidia’s gross margin declined during its fiscal fourth quarter. But its operating margin widened. Margin numbers were impressive for Broadcom, Texas Instruments, and Qualcomm, while Intel’s numbers on the chart were weak across the board. Read: New Intel CEO Has Another Big Problem to Solve Free Cash Flow Many professional investors believe that valuation measures related to company cash flows are more useful than traditional measures linked to earnings, sales or the book value. This is partly because intellectual property is very important in a service economy. A company’s free cash flow (FCF) performance can be calculated by dividing its FCF for the past 12 months by the current share price. Here’s a comparison of the six companies’ changes in free cash flow per share over the last 12 months reported from the 12-month period of the prior year, along with the free cash flow returns for the last 12 months, based on the closing prices of the shares on April 23:
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Business free cash flow can vary significantly, and a rapidly expanding business may not have a high FCF return as it continually reinvests in its business. But numbers can still be helpful. For investors looking for value games, Intel could be attractive with such a high FCF return, provided it also relies on CEO Patrick Gelsinger’s plans to turn the company around. More on FCF performance: These stocks are ‘cash cows’ that give you a better way to play the value sector Stock valuation and performance Here are the price-earnings (P / E) valuations for all six stocks, based on consensus earnings estimates for the next 12 months among analysts surveyed by FactSet, along with total return figures as of April 23:
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Nvidia is the 10-year total return champion in this group, but AMD takes the awards for five and three years. Nvidia has the highest anticipated P / E rating, slightly ahead of AMD. These are elevated valuations compared to aggregate future P / E ratios of 22.4 for the S&P 500 SPX, + 0.29% and 30.6 for the Nasdaq-100 index. But the stock market places a premium on steady double-digit sales growth. Wall Street‘s Opinion Here’s a summary of the sentiment of Wall Street analysts surveyed by FactSet:
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Important Dates May 26: Nvidia is scheduled to announce results for its first quarter of fiscal 2022 at 5pm ET. Don’t Miss: Want to Increase Your Dividend Income? The strategies of these funds can help you do it